Existing law, the Lanterman Developmental Disabilities Services Act, requires the State Department of Developmental Services to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law, until January 1, 2025, requires the department to conduct a 4-year demonstration project to determine whether community-based vocational development services increase integrated competitive employment outcomes and reduce purchase of service costs for working age adults.

This bill would make technical, nonsubstantive changes to those provisions.

Date of Hearing: May 16, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 3074

Author:(Frazier) – As Amended Ver:March 22, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill permits a regional center consumer to use concurrently tailored day services and supported employment services or a work activity program. The bill would convert an existing (but unimplemented) regional pilot project into a permanent statewide program to provide community-based vocational development services a statewide program. Specifically, this bill:

1. Authorizes a consumer in a supported employment program or work activity program to request the use of tailored day services in conjunction with his or her existing program to achieve integrated competitive employment.
2. Limits hours of tailored day services authorized under the bill to 75 hours per quarter for individuals in work activity programs (to be reduced from the individual’s work activity program hours) or 5 hours per month for individuals in group-supported employment programs.
3. Deletes the provision of existing law that limits the availability of community-based vocational developmental services to a four-year regional demonstration project (making the availability of services statewide and permanent).
4. Makes implementation of these provisions contingent on federal funding and federal approval.

FISCAL EFFECT:

1. Exact costs are difficult to estimate because the bill’s provisions are contingent upon both federal approval and federal funding. In addition, it is unknown the number of individuals who would participate. Assuming federal approval is obtained, estimated costs per every 100 participating consumers, net offsetting savings is as follows:
2. Estimated annual net costs in the range of $753,000 ($534,000 GF) to $1 million ($681,000 GF) in 2019-20, and ongoing, to provide community-based vocational day services to every 100 regional center consumers. These cost estimates include offsetting reductions in hours of work-activity program services. If 3,000 consumers (about 150 per regional center) made use of these services, projected annual costs would be about $30 million. These cost estimates are annual costs, at full implementation. In practice, if this bill is enacted, it may take several years for all regional centers to provide these services.
3. Estimated annual net costs of $76,000 ($53,000 GF) in 2019-20 and ongoing to provide tailored day services to consumers currently receiving work-activity program services. If about 500 consumers statewide used these services, projected annual costs would be about $380,000. DDS anticipates relatively low utilization of this option because individuals will likely choose community-based vocational day services due to the higher provider rate. These cost estimates are annual costs, at full implementation. In practice, if this bill is enacted, it may take several years for all regional centers to provide these services.
4. Likely annual savings in the millions per year (General Fund and federal funds). To the extent that the new services authorized in the bill improve the employment prospects of regional center consumers, it is likely that consumers will shift from more expensive work- activity programs and group-supported employment programs to less expensive individual- supported employment programs (wherein consumers are employed in the community, with ongoing assistance from regional center vendors).

It is important to note that the increased costs for a regional center consumer using the new services would likely occur only for the first year or two, whereas savings would continue as long as the consumer stays in individual supported employment. Thus the savings would increase over time while program costs are likely to remain relatively flat.

(The author has requested a $5 million allocation in the budget for a proposal similar to the one in this bill.)

COMMENTS:

1. Purpose. This bill seeks to expand employment services offered to individuals with developmental disabilities. According to the author:

People with disabilities who work in paid, community-integrated settings have a higher quality of life, better health outcomes, more access to social relationships and greater community participation. AB 3074 would better prepare these individuals to increase their earning capacity by giving them access to better job preparedness training. Increased earning capacity doesn’t just improve the quality of life for these individuals, it lessens dependence on government services.

1. Background. The Department of Developmental Services coordinates services and supports for about 250,000 people with developmental disabilities. The vast majority of these people are served by 21 regional centers, which are non-profit entities that contract with the state. The regional centers, in turn, contract with vendors to provide direct services to the developmentally disabled.

Regional centers provide a variety of services to consumers whose disabilities do not preclude them from some level of employment. Work-activity programs (often referred to as sheltered workshops) allow consumers to work alongside other individuals with disabilities in a managed location, under the supervision of regional center vendor employees. Group-supported employment programs allow consumers to work outside of a sheltered location, but still with the support of regional center vendors – for example alongside other consumers on landscaping or janitorial crews. Individual supported employment services are designed to support consumers working in a competitive employment situation. Individual supported employment services assist consumers in seeking out employment opportunities, getting hired, and adjusting to working in a competitive employment situation.

The federal Centers for Medicare and Medicaid Services has adopted revised program regulations that apply to regional center consumers participating in the state’s Home and Community Based Services Waiver. Under the revisions, the state will be obligated to ensure consumers are integrated into the community, including having access to work in competitive employment. DDS is in the process of developing a plan to bring its waiver programs into compliance with the new federal requirements. It is likely the state will have to phase out work-activity programs as a placement for most consumers under the federal regulations.

AB X2 1 (Thurmond), Chapter 3, Statutes of 2016, raised a number of rates for services provided through the regional center system, including implementing an 11.1% rate increase for supported employment services and a 7.5% rate increase for enhancing wages and benefits for staff who spend most of their time providing direct services to consumers. That bill also requires the department to submit a rate study to the Legislature by March 1, 2019.

1. Prior Legislation.

AB 1607 (Frazier), of the 2017-18 Legislative Session, was substantially similar to this bill. It was vetoed by the governor. In his veto message, Governor Brown stated, in part, “These additional services have merit; however, they should be evaluated in the annual budget process.”

SB 1427 (Pavley), of the 2015-16 Legislative Session, would have required DDS to establish a Work Transition Project to facilitate the delivery of integrated services and assist in state compliance with federal Home and Community-Based Services Waiver regulations. It was held on this committee’s Suspense File.

SB 577 (Pavley), Chapter 431, Statutes of 2014, required, contingent upon receipt of federal funding, DDS to conduct a four-year demonstration project regarding the impacts of community-based vocational development services on employment outcomes for regional center consumers and on purchase-of-service costs for working-age adults.

AB 1041 (Chesbro), Chapter 677, Statutes of 2013, created a statewide Employment First Policy and set forth requirements related to the inclusion of employment opportunities and services in a regional center consumer's Individual Program Plan (IPP).

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 24, 2018

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Blanca Rubio, Chair

ABPCA Bill Id:AB 3074 (

Author:Frazier) – As Amended Ver:March 22, 2018

SUBJECT: Developmental services: integrated competitive employment

SUMMARY: Allows a regional center consumer to request tailored day services in addition to his or her existing day program, and requires habilitation services to provide community-based vocational development services in order to increase integrated competitive employment outcomes and reduce purchase of service costs for working age adults.

Specifically, this bill:

1. Allows a consumer who is in a supported employment program or work activity program, and who has the stated goal of integrated employment in his or her individual program plan (IPP), to request tailored day services in addition to his or her existing program in order to achieve that goal if certain criteria are met, including, as specified:
   1. Determination of the type, amount, and provider of tailored day service allowed be made through the IPP process;
   2. Inclusion in the IPP of a description of how a consumer’s individualized choices and needs will be met to achieve integrated competitive employment, and the type and amount of services and staffing needed to meet the consumer’s specific choices and needs.
2. Allows an IPP to authorize a certain maximum number of hours of tailored day services to be authorized in conjunction with existing services, as follows:
   1. Up to 75 hours of service per calendar quarter for individuals currently receiving work activity program services, to be reduced from the individual’s work activity program hours, as specified;
   2. Up to five hours a month of tailored day services in addition to job coaching supports received on the job for individuals who are receiving group supported employment services.
3. Changes from Legislative intent to a requirement the inclusion of community-based vocational development services among habilitation services in order to increase effectiveness and opportunity to gain meaningful integrated competitive employment opportunities, as specified.
4. Deletes requirements for the Department of Developmental Disabilities (DDS) to conduct a four-year demonstration project, as specified, to determine whether community based vocational development services increase integrated competitive employment outcomes and reduce purchase of service costs for working age adults, and instead makes the following components of that pilot applicable statewide:
   1. Defines "community-based vocational developmental services" as services provided to enhance community employment readiness, social skill development services necessary to obtain and maintain community employment, services to use internship, apprenticeship, and volunteer opportunities to provide community-based development opportunities, services to access and participate in postsecondary education or career technical education, and building a network of community and employment opportunities, as specified;
   2. Requires, if community-based vocational development services are determined to be necessary, as specified, a plan be developed through the IPP process that may include: an inventory of potential employment interests; preferences for types of work environments or situations; identification of any training or education needed for the consumer's desired job; opportunities to explore jobs or self-employment as a means to desired employment outcomes; and identification of personal or family networks that may help a consumer achieve his or her desired employment outcomes;
   3. Requires habilitation service providers and regional centers to semiannually review the plan to document progress, additional barriers, and other changes that impact the consumer's desired employment outcome;
   4. Requires the hourly rate for community-based vocational development services be $40 per hour for a maximum of 75 hours per calendar quarter for all services identified and provided, and requires DDS to secure federal Medicaid funding for services;
   5. Allows hours of participation in community-based vocational development services be provided in lieu of hours of participation in other community-based day program services for up to two years, as specified, and prohibits consumer participation in community-based vocational development services from exceeding more than four years; and
   6. Makes implementation of these provisions contingent on federal financial participation and once any necessary federal approvals have been obtained.
5. Makes technical changes.

EXISTING LAW:

1. Establishes the Lanterman Developmental Disabilities Services Act, which declares California's responsibility for providing an array of services and supports to meet the needs of each person with developmental disabilities in the least restrictive environment, regardless of age or degree of disability, and to support their integration into the mainstream life of the community. (WIC 4500, et seq.)
2. Establishes a system of nonprofit regional centers to provide fixed points of contact in the community for all persons with developmental disabilities and their families, to coordinate services and supports best suited to them throughout their lifetime. (WIC 4620)
3. Creates a process by which regional centers may "vendorize" service providers, thereby providing a path to contract for services with that provider and ensuring maximum flexibility and availability of appropriate services and support for persons with developmental disabilities. (WIC 4648)
4. Requires the development of an IPP for each regional center consumer, which specifies services to be provided to the consumer, based on his or her individualized needs determination and preferences, and defines that planning process as the vehicle to ensure that services and supports are customized to meet the needs of consumers who are served by regional centers. (WIC 4512)
5. Allows a consumer to choose a tailored day service or vouchered community-based training service in lieu of any other regional center vendored day program, look-alike day program, supported employment program, or work activity program. (WIC 4688.21)
6. Establishes an Employment First Policy in California to prioritize opportunities for integrated, competitive employment for individuals with developmental disabilities, regardless of the severity of their disabilities, as specified. (WIC 4869)
7. Defines habilitation services as activities purchased for regional center consumers, including services provided under the Work Activity and Supported Employment programs to prepare and maintain consumers at their highest level of vocation functioning or to prepare them for referral to vocational rehabilitation services. (WIC 4851)
8. Instructs DDS to conduct a four-year demonstration project to determine whether community-based vocational development services increase integrated competitive employment outcomes and reduce purchase of service costs for working age adults. (WIC 4850.3)
9. Establishes regulations regarding the Medicaid Home and Community-Based Services state plans. (42 CFR 441.710)

FISCAL EFFECT: Unknown.

COMMENTS:

Developmental Services: In 1969, The Lanterman Developmental Disabilities Act established that individuals with developmental disabilities and their families have a right to receive the necessary supports and services required to live independently in the community. The Lanterman Act enumerates the rights of individuals with developmental disabilities, as well as the rights of their families, what services and supports are available to these individuals, and how regional centers and service providers work together to provide these supports and services. The term “developmental disability” is defined as a disability that originates before a person reaches 18 years of age, is expected to continue indefinitely, and is a significant disability for those individuals; such disabilities include, among others: epilepsy, autism spectrum disorder, and cerebral palsy.

In addition to establishing the rights of individuals, the Lanterman Act also created California’s regional center system comprised of 21 regional centers throughout the state whose primary purpose is to connect individuals with services in the community. While regional centers do not directly provide services to individuals and their families, they are charged with providing information and coordinating the delivery of services to consumers.

Individuals with developmental disabilities receive services that are outlined in an IPP, which is developed according to the needs and personal choices of the individual. The IPP is developed by an IPP team, which often includes the consumer, his or her legally authorized representative, and one or more regional center representatives. The IPP serves as a tool to maximize the opportunities for each consumer to develop relationships, integrate into community life, increase control over his or her life, and obtain positive roles in the community. The IPP is required to prioritize the services and supports that allow minors to live with their families and adults to live in the community as independently as possible.

Regional center vendors: Prior to the provision of services, vendors must undergo an approval process known as “vendorization,” wherein providers apply for contracts that enable them to serve individuals with disabilities. Through the vendorization process, regional centers verify that an applicant meets specific requirements and standards required to best serve the needs of regional centers consumers. While the vendorization process deems a vendor as eligible to provide services, it does not guarantee that a regional center will refer consumers. Vendors are also allowed to be vendorized by more than one regional center.

Employment First Policy: California’s first Employment First Policy, which is “the policy of the state that opportunities for competitive, integrated employment shall be given the highest priority for working age individuals with developmental disabilities, regardless of the severity of their disabilities,” was adopted in 2013. By adopting AB 1041 (Chesbro), Chapter 677, Statutes of 2013, California became the 12^th state to adopt an Employment First Policy.

Integrated competitive employment, meaning employment in a workplace where an individual with a disability works with people without disabilities, earns at least the minimum wage, and receives the same pay, benefits, and opportunities for promotion as workers without disabilities, is intended to be the first option considered by IPP teams when a transition-age youth or working age adult undergoes the IPP planning process. While the Employment First Policy must be considered in the IPP process, individuals may choose to prioritize goals other than integrated competitive employment.

Work services: The Work Services Program within the developmental services system provides work and community integration opportunities through Supported Employment programs, which are administered by the Department of Rehabilitation (DOR) and regional centers. These services can be provided through the vocational rehabilitation program or the Habilitation Services Program, and aim to assist finding competitive work in the community for consumers with severe disabilities who need ongoing support services to learn and perform the work. Supported Employment can involve individual or group placements where a consumer might work in the community with support services and on-the-job training provided by job coaches and is paid directly by the employer. “Work Activity Program” services also include work adjustment and supportive habilitation services, paid work, and are typically offered in a sheltered work shop setting.

Tailored Day Services: Tailored day services allow customers the ability to customize day services through individualized services and are ultimately designed to maximize the specific needs and choices of a regional center consumer. These services aim to increase a consumer’s integration and inclusion in the community, allow for volunteer activities, enable attendance of post-secondary education programs, and develop and/or maintain employment opportunities. In certain circumstances, tailored day services support goals of self-employment and small business development. Current law allows a consumer to choose tailored day services in lieu of any other regional center-vendored day program, look-alike day program, supported employment program, or work activity program.

Home and Community Based-Services waiver: Section 1915(c) of the Social Security Act, added by Congress in 1983, provided states the option to receive Home and Community-Based Services (HCBS) waivers permitting states to use Medicaid dollars to provide long-term care services in home- and community-based settings as an alternative to traditional use of institutional settings. HCBS waiver services can include personal care, case management, adult day health, habilitation, home health aide, and other services. Federal law dictates that HCBS waiver programs: demonstrate that providing waiver services won’t cost more than providing services in an institution; ensure the protection of an individual’s health and welfare; provide adequate and reasonable provider standards to meet the needs of the target population; and ensure that services follow an individualized and person-centered plan of care. For the 2017-18 fiscal year, DDS expects approximately $1.7 billion in federal funds for the HCBS waiver, to be used to pay for services for regional center consumers and for regional center operations.

The federal Centers for Medicare and Medicaid Services (CMS), in 2014, issued a new rule regarding HCBS waivers, specifically, that individuals receiving services through HCBS programs ought to be able to fully access the benefits of community living and receive services in the most integrate setting. The regulation changes also include the requirement that individuals with developmental disabilities be offered increased opportunities to participate in competitive, integrated employment.

SB 577 (Pavley), Chapter 431, Statutes of 2014, instructed DDS to conduct a four-year demonstration project to determine whether community-based vocational development services increase integrated competitive employment outcomes and reduce purchase of service costs for working age adults. SB 577 defined “community-based vocational development services” as: services provided to enhance community employment readiness, social skill development services, services to use internship, apprenticeship, and volunteer opportunities, services to access and participate in postsecondary education or career technical education, and building a network of community and employment opportunities. The pilot, which would have selected up to five volunteer regional centers to participate, was given a sunset date of January 1, 2025, and implementation is contingent upon federal financial participation; to date, the pilot project has not yet been implemented, as federal financial participation has not been received. The provisions of this bill seek to repeal the pilot project nature of the statute, and instead make the provisions of the pilot project applicable statewide.

Governor’s veto message: This bill is substantially similar to AB 1607 (Frazier), 2017, which was vetoed by the Governor. In his veto message, Governor Brown stated:

“This bill authorizes developmentally disabled consumers to participate in more than one adult day services program to receive services focused on employment. It also establishes community-based vocational development services as a new statewide program for these consumers. These additional services have merit; however, they should be evaluated in the annual budget process.”

In response to the Governor’s veto message, the author of this bill has stated that, while budgetary concerns raised by the Governor should be addressed, introducing legislation ensures proper vetting of any proposed changes to policy.

Need for this bill: According to the author, “People with disabilities who work in paid, community-integrated settings have a higher quality of life, better health outcomes, more access to social relationships and greater community participation. [This bill] would better prepare these individuals to increase their earning capacity by giving them access to better job preparedness training. Increased earning capacity doesn’t just improve the quality of life for these individuals, it lessens dependence on government services.”

PRIOR LEGISLATION:

AB 1607 (Frazier), 2017, was substantially similar to this bill and would have allowed a regional center consumer to request tailored day services in addition to his or her existing day program, among other requirements. It was vetoed by the Governor.

SB 1427 (Pavley) of 2016, would have required DDS to establish a Work Transition Project to facilitate the delivery or integrated services and assist in state compliance with federal Home and Community-Based Services Waiver regulations. It was held in the Assembly Appropriations Committee.

SB 577 (Pavley), Chapter 431, Statutes of 2014, required, contingent upon the receipt of federal funding, DDS to conduct a four-year demonstration project regarding the impacts of community-based vocational development services on employment outcomes for regional center consumers and on purchase-of-service costs for working-age adults.

AB 1041 (Chesbro), Chapter 677, Statutes of 2013, created a statewide Employment First Policy and set forth requirements related to the inclusion of employment opportunities and services in a regional center consumer's IPP.

REGISTERED SUPPORT / OPPOSITION:

Support

Disability Rights California

Opposition

None on file.

Analysis Prepared by: Kelsy Castillo / HUM. S. / (916) 319-2089